Oil prices have dropped as investors begin to doubt whether OPEC countries will decrease output as expected under the deal.
Predictions of increase in US output this year also facilitated the price fall.
Benchmark Brent crude oil LCOc1 fell by 10 cents to touch $55.35 per barrel while US light crude CLc1 was also down by 10 cents to reach $52.27 a barrel, reported Reuters.
In a deal last year, OPEC countries agreed to reduce oil production by 1.2 million barrels per day from 1 January this year to end the global oil glut. Key non-OPEC members such as Russia also gave their consent to decrease oil production.
However, global oil production remained high, creating doubt among investors.
SEB Markets chief commodities analyst at Oslo was quoted by the news agency as saying: “Cuts by OPEC and non-OPEC countries have just started and it will take some time for them to filter through.”
The report by Goldman Sachs stating that US oil production is expected to increase this year by 235,000bpd also served as deterrent for oil prices. The report offers the data based on drilled wells in the country.
Earlier, Saudi Arabian Energy Minister Khalid al-Falih said that the deal to reduce output may not extend beyond six months due to the 'level of compliance'.